Running a trade body is a bit like being a member of a big family where trying to be on good terms with everyone at any one time is not just impossible, it is doubtful if it is even worth the attempt.
If Aifa’s objective is to strengthen professionalism, this involves a significant increase in the level of tested competence required by any adviser. Even if the RDR were stopped in its tracks, the average advice business needs serious reorganisation if it is to continue and prosper. The idea that change should be avoided is simply untenable.
Just as segmentation is imp-ortant in getting a planning firm into better shape, perhaps segmentation needs to happen within the trade body sector. Trying to represent everyone from transactional firms to chartered financial planning firms is guaranteed to disappoint some if not all. Straddling the fence is not an option, yet Aifa has committed the same error that the ABI has in that it runs on consensus and this is not the best option to attain any stated objective.
At some point, chartered financial planners will need an effective lobbying function and that is not the role of a professional body, which makes the IFP’s appearance at the Treasury select comm-ittee as inappropriate as it was inept. A professional body’s role seems to be something that many people fail to recog-nise. Part of the reason for this is caused by other bodies stray-ing into the realm of represen-tation. After all, trade bodies generally do not have the ability or inclination to disci-pline their membership and therein lies the key difference with a professional body.
Trade bodies, like trade unions, need to represent the views of the membership and so corporate membership, which places the power with the bigger firms, means that their views will be prominent in forming policy and strategy.
Unless there is some stratification to create a somewhat artificial but effective collec-tive representative view, Aifa faces an impossible task if its objective is to represent all independents. Removing any form of block voting is an option but funding inevitably plays a part. It is regrettable there has been a delay between Chris Cummings leaving and Stephen Gay arriving but that is not something that Aifa had any control over.
The whole issue of grand-fathering is about people not wanting to be tested in any format. The accusation that the RDR and in particular the FSA are reducing the availability of advice ignores the point that the real source of the reduction will be the intran-sigence of the vocal minority. The risk to the public that flows from the avowed avoid-ance of competence not being fully tested is clear and is evid-enced in a variety of ways.
One source of concern is the major employee benefits IFAs suggesting in press statements that the smaller firms are doomed when consultancy charging is introduced while taking maximum commission simultaneously. This kind of hypocrisy comes from those to whom professionalism is a dirty word and the sooner we are rid of their type the better.
I joined and then left Aifa when I determined that those looking at strategy were the same people resistant to change. This mismatch has led them to where they are now and Gay will need to make them see that change is an opportunity.
Robert Reid is managing director of Syndaxi Chartered Financial Planners